Refer to Figure 28-6. If firms and workers have rational ...

[moongchi]

Refer to Figure 28-6. If firms and workers have rational expectations, an expansionary monetary policy will cause the short-run equilibrium to move from
 
  A) point B to point A.
  B) point B to point C.
  C) point C to point A.
  D) point A to point B.
  E) point A to point C.

Question 2

In reality, the Fed is unable to use monetary policy to keep real GDP exactly at its potential level.
 
  Indicate whether the statement is true or false

[kiamars2010]

Answer to Question 1

E

Answer to Question 2

TRUE

[moongchi]

TYSM

[bdobbins]

Thanks for the timely response, appreciate it